World’s largest drug maker Pfizer Inc upped its proposed takeover bid from $98.9 billion to $106 billion to take over British giant AstraZeneca. However, the UK-based firm has once again rejected the offer saying it ‘substantially undervalues the company.’

Pfizer offered 1.845 shares of the combined entity besides £15.98 in cash for each share of AstraZeneca. The proposal represents an indicative value of £50 per AstraZeneca share and the total deal value at $106 billion.

“We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies,” said Ian Read, chairman and CEO of Pfizer.

AstraZeneca board rejected Pfizer’s proposal saying it ‘substantially undervalues the company’ and will not engage with US drug maker on its basis. It attributed its decision to the large proportion of the deal value payable in stock.

“The large proportion of the consideration payable in Pfizer shares and the tax-driven inversion structure remain unchanged. Accordingly, the board has rejected the proposal,” according to a statement on Friday.

Leif Johansson, chairman of AstraZeneca, said: “AstraZeneca continues to invest significantly in research, development and manufacturing in the UK, Sweden and the US. We are showing strong momentum as an independent company, in particular with our exciting, rapidly progressing pipeline, which the board believes will deliver significant value for shareholders.”

He added that Pfizer’s proposal would dramatically dilute AstraZeneca shareholders’ exposure to its unique pipeline and would create risks around its delivery.

Pfizer had earlier submitted a preliminary, non-binding indication of interest to the board of directors of AstraZeneca in January 2014 regarding a possible merger transaction. It had offered £13.98 in cash (30 per cent of the deal value) and 1.758 Pfizer shares (70 per cent of the deal value) per AstraZeneca share, representing a value of £46.61 per AstraZeneca share. The proposal also involved a new US-listed and headquartered holding company. After limited high-level discussions, AstraZeneca declined to pursue negotiations.

Early this week, Pfizer revived its interest in AstraZeneca. Although it did not make a concrete offer it tweaked some terms of the previous offer and offered to create a new UK incorporated holding company as against the previous proposal which sought to create a US-based listed holding entity.